Archive | Planning

After nearly two years in Buenos Aires, I thought it would be a good time to revisit some of my earlier posts on planning my original move from the States and update them based on my experiences. The first topic I decided to start with was the one on using a mail forwarding service to handle my US postal mail while I was gone.

I had originally converted as many of my paper bills to e-bills before leaving the States, and this turned out to be a great solution for about 70% of my mail. Unfortunately, not everyone offers e-billing (why?) and there are various other documents that still require physical mail as well. This is where a mail forwarding service proved invaluable. They receive your mail for you, scan it and put it on the web, and even batch it and send it somewhere else for you.

Originally, I signed up with Earth Class Mail (ECM), and while the service was great, I can no longer recommend them due to their massive price increases. Originally, I was paying $19.95/mo for up to 5 different names, 100 received mail pieces, 100 scanned pages per month and recycling or shredding. Their price for the same services is now $19.95/mo for receiving mail, $4.95/mo for shredding services and a ridiculous $1.50/mail for black and white scanning. This cost alone really adds up and makes this service prohibitively expensive.

About three months ago I started to look for a new service and found two that looked more reasonable – MailboxForwarding and Virtual Post Mail. MailboxForwarding plans start at $9.95/mo $14.95/mo and include 40 received mail pieces and 10 scanned items, while Virtual Post Mail has a $9.95/mo plan that includes 25 10 received mail items and 5 scanned items (though these numbers can be greatly increased through their constant promotions). While I preferred the Virtual Post Mail web site’s design, I went with MailboxForwarding because I needed to receive mail to multiple recipients and they offered this with their lowest plan.

Now, I’d suggest that if you are signing up for the first time, you pick wisely because if you need to change, it is a bit of a pain in the ass. First, you need to change your address everywhere. Then, you also need to send a notarized USPS form that allows that company to receive mail for you. If you are doing this from Buenos Aires, you will need to make a trip to the embassy to have the form notarized ($50) and then send it via FedEx or DHL. Finally, the USPS does not allow you to submit a change of address form for these services, so if you change services you will need to keep them both active for a few months in order to make sure you do not miss any mail. I’m currently on my third month of paying for both services and just about to cancel ECM now.

As for MailboxForwarding, while the service is not as slick as ECM was, their support has been pretty good and it does what it is supposed to do. Here are the things that ECM does better:

While both send email when new mail has been received, ECM actually sends you a scan of the outside of the envelope which allows you to see if it is important or not without logging into the web site

ECM has a better web interface, which includes a trash folder that allows you to recover mistakenly deleted mail items. At MailboxForwarding, you have to create a support ticket to recover mail.

ECM has better scans of your mail. MailboxForwarding includes the envelope in the scan, which is useless in my opinion and requires me to use a program to split the pages of a PDF.

Like I said though, MailboxForwarding is only $9.95/mo $14.95/mo and does what it is supposed to do, so I’m happy that I made the switch.

If you use one of these services or another one, let me know your thoughts in the comments.

Seeing as how today is April 15th (the day taxes are due in the United States), I thought it would be fitting to finally finish the post I had been working on regarding some of the tax benefits to being an expat.

When I decided to move to Buenos Aires last year, I wasn’t aware that there could also be some pretty interesting tax savings involved in living out of the country. As a U.S. citizen living out of the country you are still taxed on your worldwide income and must still file a tax return. In fact, it is against the law to give up your U.S. citizenship in order to avoid U.S. taxes. However, you may be able to exclude the first $87,600 of your income from taxes as well as exclude or deduct certain foreign housing payments.

According to the IRS Publication 54 which covers this, to claim the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction, you must meet all three of the following requirements.

Your tax home must be in a foreign country.

You must have foreign earned income.

You must be either:

A U.S. citizen who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year,

A U.S. resident alien who is a citizen or national of a country with which the United States has an income tax treaty in effect and who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year, or

A U.S. citizen or a U.S. resident alien who is physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months.

Clearly, one of the biggest benefits for U.S. expats is the ability to exclude up to $87,600 in foreign earned income. According to the IRS, foreign earned income generally is income you receive for services you perform during a period in which you meet both of the following requirements:

Your tax home is in a foreign country.

You meet either the bona fide residence test or the physical presence test.

The source of your earned income is the place where you perform the services for which you received the income. Foreign earned income is income you receive for working in a foreign country. Where or how you are paid has no effect on the source of the income. For example, income you receive for work done in Argentina is income from a foreign source even if the income is paid directly to your bank account in the United States and your employer is located in New York City.

The IRS covers this in a lot of detail in Publication 54 and, of course, you should consult with an accountant as well.

Like many expats, we’re here on tourist visas which are only valid for 90 days. Now, there’s a few ways to extend that time:

Head to prorrogas de permanencia at the office of migraciones and pay for a 90 day extension. The cost is $100 pesos and you can only do this once per 90 day original visa. Since our Spanish is pretty poor, we thought this would be too much of a headache.

Overstay your visa and pay the $50 peso penalty (UPDATE, 4/21: This fee has increased to $300 pesos.) when you leave. A lot of people report no problem with doing this, but we wanted to be completely legal in case we ever apply for a full visa. We just didn’t want this to ever be an issue.

Head out of the country and get a new 90 day stamp when you come back. We opted for this approach and took off with our friend Scott to Uruguay last weekend.

Getting from Buenos Aires to Colonia, Uruguay is a pretty easy process. The Buquebus ferry leaves several times a day from their terminal near Puerto Madero. They have both high-speed ($250 peso round-trip, takes 1 hour) and regular ($181 peso round-trip, takes 3 hours) service, but I’d strongly recommend the high-speed option if you’re only going for the day. I’d also recommend buying tickets in advance from their web site, and not showing up at 11:15am to try and get tickets for the 11:30am ferry. (Yes, we missed it and had to wait for the 2:30pm ferry.) The trip itself is pretty comfortable and you end up in Colonia in just under an hour.

Colonia is a small city (pop. 21,714) with 7 kilometers of beach front along the Rio de la Plata and a renowned historic quarter. It’s a great place for a day trip, but I couldn’t see spending much more time than that there. We decided to rent transportation so that we could take in all of Colonia in the few hours that we had there, but since we missed the early ferry, the car rental places at the end of the ferry dock were mostly sold out for the day. Luckily, Thrifty had one golf cart left – for only U$12 per hour. So, we hopped in our new wheels and took off exploring.

We cruised down the beachfront taking in the coastline and stopping at a couple of parks before heading up to check out the Sheraton Colonia Golf Club. Then, we headed over to check out the old bull fighting ring before driving back to the historic quarter. The old town part of Colonia is a designated World Heritage Site, and provides a lot of photo opportunities. There’s also a lot of bars, restaurants and shops to explore. Make sure you try a chivito from one of the silver roadside food vendors – it’s a high-calorie sandwich made up of churrasco beef, ham, mayonnaise, olives, mozzarella, tomatoes, and egg served on a roll with a side of fries. Yum!

After that, we dropped off the golf cart and it was back to the ferry for our trip back to Buenos Aires. There’s a duty-free store on the ferry that is extremely popular. Just remember to bring cash if you want to buy anything as they only take credit cards at the end of the trip and then it often doesn’t work.

If you use your credit or ATM cards in Argentina, you’ll be losing 50% on your money. Use Xoom to transfer money to Argentina for your trip.

Please use the links above as the information below is now outdated.

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The Argentine Post is reporting that the Argentine government is planning to require Americans and citizens of 115 other countries to pay for a tourist visa to visit Argentina. This would be in direct reciprocity for countries that charge Argentines a similar visa fee. This fee will go into effect on January 1, 2009.

In addition, today’s La Nacion newspaper has an article quoting the Interior Minister that such a reciprocal fee is an “act of justice” and that a U$134 fee will be charged for Americans entering the country. He also states that it has nothing to do with the visa, which means that every 90 days us expats on tourist visas will have to leave the country and re-pay this fee upon entering again. There will not be a requirement to get a visa before coming to the country, just the need to pay this fee when entering.

While Brazil already charges Americans a reciprocal U$150 fee for a visa, this visa is good for 5 years. While the new Argentine fee may not hit many one-time visitors that hard, it will add a significant financial burden to the expat community on tourist visas who must leave and return every 90 days. It might be time to look into getting a longer term visa as the lawyer’s fees and hassle might now be easily worth it.

UPDATE (2/25/09): The new fee which was scheduled to start march 2009 has now been postponed indefinitely.

UPDATE (12/11/09): That indefinite postponement is coming to an end as the new fees were just announced today. Read more…